I found this article by Charles Wolfe of the Rand Corporation and the Hoover Institution to be quite insightful. He argues that the Fed has been keeping interest rates at virtually zero and the consequence has been to increase inequality in American society since 2008 when the zero rate began. I agree with Mr Wolf. The reason is pretty straightforward.
When the interest rate is zero (or near zero) banks have an incentive to keep their money with the Federal Reserve where they get a small but safe return. 'Safe' is a greater return than most riskier returns they would get in the open market.
Additionally as capital accumulates inside corporations they look outside and find that with a horizon of zero interest there are not too many investments where innovation will yield more money to the corporation than its own operation.
Most importantly when interest rates are zero, individual savings decline and individual's find it less appealing to make investments and more appealing to spend and consume.
All of these consequences lead to the rich benefiting the most. Those of us who have seen periods of low interest rate know that this is a bad time for bonds because bonds can only lose face value. It is a good time for stock market increases.
It is the wealthy who benefit from stock market increases disproportionately while small shareholders and people in the middle and lower economic categories are enjoying the consumption that zero interest rate makes possible.
Thank you Mr Wolf for making such an obviously true statement explicit.